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Thread summary:

Real estate: short sale, agent, realtor, loan, home inspections, mortgage.

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Old 08-04-2008, 09:11 AM
 
13 posts, read 37,769 times
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My husband and I have been looking for our new home, and we found one we really like- what we've seen of it and what we know of it. But we need some advice.

Here's the situation. It's a short sale, currently occupied by tenants. The house is only 2 yrs old. We've seen a floor plan (compliments of the builders), and we've seen the outside of the house, front only. According to our RE, the tenants aren't letting anyone in to view the house and she doesn't know why. We know it's a VA loan the owners have been unable to repay. We know, based on comparables, this house is a bargain- even if it needs work inside. She, our RE, wants us to put a contract with the stipulation "contingent upon viewing" and earnest money and an out option down on the house. (No, she's not pushing this- she's actually showing us other properties; apparently, this is the requirement written by the seller's agent.) So, we're looking at $550 out of pocket right off the bat without ever seeing the interior. (All but the $50 for the out option is retuned to us if we decide to back out.) But, I'm nervous. Yes, I am about 90% certain this is the house I want, but I've never heard of putting a contract on a house without seeing it first. Have you?? Is this clause safe? What do you think?
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Old 08-04-2008, 09:18 AM
 
Location: Hernando County, FL
8,489 posts, read 20,632,846 times
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It should be safe dependent upon how it is written.

I have done a few like this with out of area people, usually with a stipulation to view within 3 days or so. Not usually long term.

I don't understand the $50 though. Who is getting that?

Sounds like the agent or seller trying to make some extra money for nothing.

I would also be a bit leery because if the tenant is not letting anyone in, what might they do before they move out?

If I was the owner I would be getting people in. Tenant rights are one thing but not letting anyone see the house is ridiculous.
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Old 08-04-2008, 09:28 AM
 
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From what little I know, the $50 for the "out option" is like a get out of jail free card- you can walk away from the contract for any reason at any time prior to closing without losing your earnest money. It seems pretty standard out here (San Antonio). (Sounds like a rip off to me, in most cases, but in this situation, I think it may actually be a good idea.)

The tenants make me nervous, too. I'm half expecting to replace blinds, carpet, and (for my own personal pleasure) flooring in the bathrooms and probably the kitchen counter b/c I can't abide cheap counter tops. (I'm expecting our 4th boy; I require durability. LOL.) Since it's a VA loan, I'm assuming the owners are military; I do know they don't live locally. So, that may be part of the problem, there. I just need to see the inside so I will know how much/what else needs to be done.
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Old 08-04-2008, 09:29 AM
 
27,213 posts, read 46,724,071 times
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I would never sign this...

1. because of the $ 50.-

2. You should put in there also contignent on a home inspections and an amount for which above you can be able to back out.

3. What if in between the tenants moving out and you are waiting to close the house is more damaged?

I just saw a home we really liked and the short sale price is very good but the realtor agreed with us that we have no clue what stated it will be in between now and closing. I recently closed on a short sale and a tenant was living there but it was very nice and no damage. It still was a gamble but everything turned out okay, but in this last case it is a divorce, zero down, and even when we saw the inside the husband, boy friend of the wife and the wife were there...strange....and the child had already colored the kitchen wall and more was damaged....The wife asked the realtor what the bank was asking/list price and she was shocked "shut up, your kidding me, OMG" were here words and she went on with what she was doing...the realtor also thought it was a weird situation and wasn't sure if this house was going to stay as it was right now and is going to try to get the bank find a solution to get the people out, since in her mind this is not working to get it sold....I guess it will be hard to get them out unless it will foreclose....I'm very happy that the realtor was very honest and also told us other potential buyers had the same remarks on top of the addendum which favors the bank very much and others just like us walked away.
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Old 08-04-2008, 09:37 AM
 
Location: Barrington
63,919 posts, read 46,707,495 times
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Quote:
Originally Posted by narnmacon View Post
From what little I know, the $50 for the "out option" is like a get out of jail free card- you can walk away from the contract for any reason at any time prior to closing without losing your earnest money. It seems pretty standard out here (San Antonio). (Sounds like a rip off to me, in most cases, but in this situation, I think it may actually be a good idea.)
Are you sure about this?
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Old 08-04-2008, 09:55 AM
 
13 posts, read 37,769 times
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I haven't read the contract yet since I haven't decided whether to even go so far as to meet at the RE's office and maybe sign, but that's what she said and I don't have any reason to doubt her competency. That doesn't mean I'm willing to let a RE lead us blindly (hence, my presence on this board for advice from those more knowldegeable than I), but I am willing to tentatively give her the beneift of the doubt. Ya know?
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Old 08-04-2008, 10:04 AM
 
Location: Barrington
63,919 posts, read 46,707,495 times
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Quote:
Originally Posted by narnmacon View Post
I haven't read the contract yet since I haven't decided whether to even go so far as to meet at the RE's office and maybe sign, but that's what she said and I don't have any reason to doubt her competency. That doesn't mean I'm willing to let a RE lead us blindly (hence, my presence on this board for advice from those more knowldegeable than I), but I am willing to tentatively give her the beneift of the doubt. Ya know?
The fee for option concept does not exist in my state.

As I understand it, in those states that have a fee for option, there is a limited and agreed upon timeframe for the buyer to back out for any reason, different from anytime.

No doubt, a Realtor from Texas will come along and clairify.
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Old 08-04-2008, 10:34 AM
 
13 posts, read 37,769 times
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Update: I just got off the phone w/my RE. She's been trying all weekend to get in touch w/the listing agent. To no avail. But, we have learned the mortgage holder is Country Wide. Any experience buying short sales from them? Do they tend to move quickly? I would like to close w/in 3mos. I also asked if the eviction process has been started, but my RE doesn't know yet. (Still waiting on the listing agent.) I also asked about pets the tenants have or may have and what kind of damage they (the sellers or LA) suspect.

I asked for clarification on the option fee. The usual going rate for the area is $10/day for 7-10 days in which time you have the home inspected, etc. and can walk away w/out losing the earnest money. (This is the third agent I've heard this from around here- different companies.)

Is buying a "normal" house this big of a pain in the neck?? Do you always risk your inspection fees only to find out a house may have such a huge problem, you feel unable to deal with it, so you lose the money you paid to have the inspection done? It doesn't seem fair. It seems like you could go through three (or so) inspections on different properties before you find one that's "it." It seems like the buyer gets screwed. There should be a way to go through the process and pay only if the house goes to closing. Or something like that. Of course, this is just ranting out of anxiety and aggravation. :-)
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Old 08-04-2008, 11:06 AM
 
Location: Barrington
63,919 posts, read 46,707,495 times
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Quote:
Originally Posted by narnmacon View Post
Update: I just got off the phone w/my RE. She's been trying all weekend to get in touch w/the listing agent. To no avail. But, we have learned the mortgage holder is Country Wide. Any experience buying short sales from them? Do they tend to move quickly? I would like to close w/in 3mos. I also asked if the eviction process has been started, but my RE doesn't know yet. (Still waiting on the listing agent.) I also asked about pets the tenants have or may have and what kind of damage they (the sellers or LA) suspect.

I asked for clarification on the option fee. The usual going rate for the area is $10/day for 7-10 days in which time you have the home inspected, etc. and can walk away w/out losing the earnest money. (This is the third agent I've heard this from around here- different companies.)

Is buying a "normal" house this big of a pain in the neck?? Do you always risk your inspection fees only to find out a house may have such a huge problem, you feel unable to deal with it, so you lose the money you paid to have the inspection done? It doesn't seem fair. It seems like you could go through three (or so) inspections on different properties before you find one that's "it." It seems like the buyer gets screwed. There should be a way to go through the process and pay only if the house goes to closing. Or something like that. Of course, this is just ranting out of anxiety and aggravation. :-)
Ok. Being able to walk away, during the initial 7-10 day period, is not the same thing as walking away at any time, for any reason.

It's increasingly apparent that each foreclosed property deal is unique and often comes down to the specific people involved. There are agents who specialize in listing pre-foreclosed/ foreclosed properties and in many cases, have substantially more listings than they can reasonably handle and this can cause delays.

Some people have reasonable experiences with Countrywide and others, not. It depends on the luck of the draw, in terms of the employee handling the case, how much he/she has going on at any given time and the buyer's perception of what is reasonable or not. There may also be other offers on the same property and the processor is going to work it.

Buying foreclosed property is substantially more complicated than non foreclosed property and frought with delays.

Buyers should always insist upon a home inspection contingency within their contract. Buyers risk the cost of the inspection, should they decide to not proceed.

If the potential loss of the cost of the inspection has the potential to create a financial hardship or strain as opposed to an annoyance, it might be more prudent to postpone buying until more money is accumulated.

I can appreciate your frustration and venting.
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Old 08-04-2008, 11:23 AM
 
Location: Central Texas
20,958 posts, read 45,383,992 times
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Around here, it's usually been $100 for a 10 day option period. Some agents/sellers are trying to cut it to 7 days, which isn't a reasonable period of time to get an inspection and for both parties to get estimates for all possible needed repairs and repairs negotiated, especially since it's 10 days, not 10 business days. And, yes, you can only walk during the option period, not at any time during the contract.
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